Credit Information to be used in Cambodia's Telecommunications Sector

Pre Pay mobile phones are the prevalent form of communications subscription plan in the Kingdom of Cambodia however they are subject to high volumes of “Churn” as customers switch between different pre-paid operators and shop around for the latest subscription plan offers and competitive rates.

With the recent formation of the Credit Bureau Cambodia telecommunications companies now have access to relevant and pertinent real time credit data that can help them reduce their churn rates by focusing more on the quality of customer acquisition.  The benefits of offering post pay subscriptions to the high value and credit worthy customers are numerous, and include acquiring customers want to lock into post paid plans for convenience and cash flow reasons, providing competitive differentiators for post paid services and being able to acquire highly profitable corporate accounts on a post paid basis.

The upside for the telecommunications operators is that a quality post paid customer is subject to much lower churn rates than pre-pay card plans.

"Telecommunications companies are aware that the financial relationship between them and their customers is critical to ensuring that their post paid billing collection is on target.  If an operator is providing pre pay services at the moment they may wish to conduct credit reviews on their existing customer base to understand which customers are suitable to be offered more profitable and lower churn rate post pay services" explained Steve Vaile of the CBC.

Credit Bureau Cambodia (CBC) information is now available to Telecommunications providers in the Kingdom of Cambodia allowing them to use accurate credit data to provide red flag credit indicators, view an increase in late payments and view other credit obligations that reduce the risk of billing defaults at your company.   This requires the telecommunications operator to sign up to the CBC Code of conduct that defines and regulates how they use this data in line with Cambodian Laws on credit reporting and consumer data privacy.

Of course almost all companies in Europe and the USA currently use credit data to screen the quality of customer applications, acquire more profitable corporate post paid accounts and manage their billing risk and credit actions on new accounts.

When telecommunications providers acquire new customers they should be mindful about customer quality, especially cable and telecom operators.

Companies often burn money spent on marketing and communications acquiring customers that are not in a financial position to pay their bills.  Often this can impact an operator for one to three billing cycles causing the customer to either move back to their old plan or seek another provider, in which case the capital expended acquiring the customer has been lost.

Screening customer quality to ensure that prospective customers have the financial capacity to pay post paid bills increases profitability, builds brand loyalty and higher lifetime value, and reduces the changes of them moving to a competitor.  The result increased profitability and fewer bad debts by ensuring that any subscription plan is in line with the customer’s capacity to pay.

By analysing your best customers’ profiles or most profitable underwriting policies and integrating profit-building criteria into your campaign customer acquisition is more targeted, better matched and produces higher payback ratios.

Many operators find credit information to be rich source of decisioning data and have discovered that by adding consumer-credit information to their acquisition formula they not only improve prospect quality, they also reduce on-boarding costs. Derogatory payment information, revolving debt levels or unacceptable debt-to-income ratios will all surface in the process, informing and improving your credit management decisions as a Telecommunications operator in Cambodia.

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